School funding trial starts today

AUSTIN -- As school districts representing more than 3 million Texas schoolchildren go to court today over school funding, they are united on one battlefield but are fighting from multiple fronts.

Most Tarrant County school districts have allied with one of three major groups of districts suing the state. All are arguing that the Legislature has failed its constitutional duty to sufficiently fund schools, particularly in the face of increasingly rigorous testing standards.

Aledo, Arlington and Mansfield are part of the largest coalition, which is focused on long-standing inequities in the school finance system. Others, including Fort Worth and Keller, argue that underfunding by the Legislature has taken away their discretion to make financial decisions and left them strapped for resources. A group of property-wealthy districts already sharing a portion of their tax revenue, including Carroll and Northwest, is playing defense while arguing that the funding system has forced a de facto, illegal statewide property tax.

"At 30,000 feet we all stand united. We've got to fix a system that's broken," said Bobby Rigues, president of the Aledo school board.

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The Keller district has been hit particularly hard by state budget cuts and voters' rejection of a school tax increase. The district laid off staff, increased classroom sizes and ended free bus service.

"There is no other thing to do," Deputy Superintendent Mark Youngs said. "We have so many competing interests and so few dollars."

The trial before state District Judge John Dietz of Travis County, who heard the previous round of school finance litigation in 2004, is expected to last through the year's end.

He has called this the "granddaddy of all these cases."

For the first time, a handful of charter schools are making an argument that the lack of facility funding available to traditional school districts is harming their students. And in a significant development, a business group and school choice advocates will be pressing the question of whether the system is making efficient use of taxpayer dollars.

However Dietz rules, the case will be appealed to the Texas Supreme Court. Previous school finance rulings have been the impetus for major changes affecting taxpayers, including the property tax-sharing system widely known as Robin Hood and the 2006 tax swap, which lowered property taxes and broadened the state's main business tax.

The Supreme Court, in previous school finance cases, has interpreted language from the 1876 Texas Constitution to require the public school system to be efficient, adequate and suitable. The constitution also prohibits a statewide property tax, and courts have interpreted that to mean school districts must have "meaningful discretion" in setting their property tax rates.

Dietz asked the parties to focus their pretrial briefs on two issues: what legal standard courts must apply when determining whether the Legislature has satisfied the "suitable provision" clause, and the amount of local financial supplementation the school funding system can tolerate before it becomes "inefficient."

Texas Attorney General Greg Abbott has responded that "one or more districts' failure to satisfy their responsibilities under the law need not undermine the suitability of the entire public school system because those failures may stem from the districts' local implementation." On the question of local supplementation, the state noted that funding disparities and tax rates between districts are much less than they were in the mid-1980s when the school funding case known as Edgewood was filed.

"Because the school finance system is significantly more equitable than it was when the [Supreme] Court decided Edgewood I, even with district supplementation, the system enacted by the Texas Legislature is not inefficient as a constitutional manner," the state said in a court filing.

Here is a breakdown of the school district alliances and what each is seeking from the litigation:

Texas Taxpayer & Student Fairness Coalition

Organized around the issue of funding equity, this group includes more than 400 districts serving an estimated 1.3 million students. Tarrant County districts signed on to this group are Aledo, Arlington, Azle, Burleson, Castleberry, Crowley, Everman, Kennedale, Lake Worth, Mansfield and White Settlement.

Most received less than the state weighted average of $5,996 per student for the 2011-12 school year, according to the Equity Center, an Austin education research and advocacy group.

If the Arlington district was funded at the state average, it would have an additional $44.5 million dollars to serve its 65,000 students. Cindy Powell, associate superintendent of finance for the district, said additional resources would be used for smaller classrooms in secondary schools, tutoring and services for at-risk students and for career-readiness, vocational education.

The Arlington district received $5,356 per student last year and Mansfield received $5,615. Those figures are based on weighted average daily attendance, which includes additional funding for special education, vocational, and gifted and talented programs.

"There are some huge discrepancies," Mansfield school board President Beth Light said. "We are paid more per child on our average attendance rate than Arlington is, and yet those two districts are right next to each other. To me, every student that is in a public school in Texas should all bring the same amount of money to that district."

At $6,629 per student, Aledo is well above the state average. But the small district decided to join the equity group because it is a fairness issue, Rigues said. He said it is not fair for one taxpayer to pay a school operations tax rate of $1.17 per $100 of assessed property value and receive less funding per student than a taxpayer in a district with a rate of $1.04.

Calhoun County ISD

These 90 property-wealthy districts include Carroll, Eagle Mountain-Saginaw, Godley, Grapevine-Colleyville and Northwest. Because they can raise a lot of money with a low tax rate, they must send some to the state, which redistributes it to poorer districts.

The 90 districts benefited the most from state property tax cuts in 2006 because lawmakers agreed to make up the difference in lost school revenue. At the same time, however, lawmakers said any extra money voters approve for local enrichment is subject to partial recapture.

These districts represent a powerful political force and have worked to mobilize parents to protest the $5.4 billion in cuts the Legislature made in 2011 to balance the budget.

The impact of the cuts, coming as the state implements a new end-of-course testing program, "really cut into the meat of our core services," said Read Ballew, president of the Grapevine-Carroll school board.

The Northwest district, which taxes at the same $1.04 rate as lower-wealth districts but received $7,076 per student last year, said the system fails to provide schools with enough funding to meet state educational standards.

Edgewood ISD

These South Texas districts serve a population that is largely low-income and English-learning students. They argue that allotments to help with extra costs of educating these students haven't been updated since 1984.

In his 2004 ruling, Dietz warned that Texas must close the educational achievement gap between those students who are economically disadvantaged and those who are not or prepare "for a future in Texas that is dismally poor, needy and ignorant."

Fort Bend ISD

The state's eight largest districts and about 72 others have joined this group, which is focused less on equity and more on the overall level of state funding. Fort Worth, Keller and Denton are part of this alliance.

But equity is not far from the surface.

"Northwest has $1,000 more per year to educate and house and transport that child. Those are the reasons that the next lawsuit came up," said Youngs, of the Keller district. If Keller received the same funding, it would have $33 million more to deal with its growth, he said.

Fort Worth school trustees split on whether to join the equity group or stick with the other large urban districts. "I don't think there's a difference in either group. Equity will be argued first, then adequacy behind that," said Hank Johnson, deputy superintendent for finance, business and operations.

"We've got a lot of challenges, a lot of low-income students, a lot of English language learners," he said.

Texas Charter School Association

While no Tarrant County charter schools have joined the lawsuit, many are hoping that it will result in more funding for facilities. Some lower-wealth districts receive state help to build schools, but charter schools serving economically disadvantaged students are on their own.

Joyce Brown, founder of East Fort Worth Montessori, said the school has had to take out loans and phase in improvements to its 1960s building. When the school, which serves 300 elementary students, sustained extensive water damage several years ago, it was lucky to get donated furniture and equipment from a private school that was closing, she said.

The charter school group is also challenging the state's cap on charter school enrollment.

Texans for Real Efficiency & Equity in Education

This coalition, which has been allowed to intervene in the case, represents a new argument that efficiency doesn't necessarily mean more funding. It includes the Texas Association of Business, school choice advocates and Kent Grusendorf, who formerly represented Arlington in the Texas House and was chairman of the Public Education Committee.

They want a study on the costs of educating a child, saying that information is necessary to determine whether the system is efficient. This group also favors lifting the charter school cap and lessening state regulations on public schools.

"The authority for the evaluation of a more than $50 billion per year system should not be in the control of the same governmental branch that controls the funds," the coalition said in its lawsuit. "No successful -- or efficient -- enterprise would spend over $50 billion per year without assurance that the funds were to be allocated in an effective manner in the first place."